Currency manipulation unacceptable: ED

By Staff Reporter

PRESIDENT Emmerson Mnangagwa says manipulation of the exchange rate by members of the business community should not be tolerated as this amounts to economic sabotage.

This comes on the heels of a directive by the central bank to freeze the accounts of leading firms in the country including Sakunda, owned by Kudakwashe Tagwirei, Croco Motors and Spartan Security on suspicion of currency manipulation.

Delivering his State Of The Nation Address (SONA) yesterday, Mnangagwa called for fiscal discipline from all sectors.

“I am encouraged by the nation’s positive response to the currency reforms which we have embarked on. Government is equally pleased with the relative stability of the exchange rate over the past eight weeks. However, last week’s events of exchange rate manipulation, amounts to economic sabotage and should not be tolerated. We all need to adhere to the rule of law and foster discipline at all levels,” he said.

Mnangagwa said government is putting mechanisms in place to end the liquidity crisis bedevilling the country which has resulted in EcoCash agents selling cash at a premium.

“Government is fully aware of the challenges faced by the public in accessing cash, which has resulted in some unscrupulous traders selling cash in exchange for electronic money.

“Appropriate measures are being taken to address the cash situation, which include a gradual removal of arbitrage opportunities created through multi-tier pricing,” he said.

To this end, the central bank has effectively banned cash in, cash out and cash back transactions with a view to restoring sanity in the broad economy. However, the directive has since been challenged in court by Econet sister company, Cassava Smartech, which hosts the EcoCash platform.

“The charging of commissions outside the approved framework adversely affects the smooth operation of payment systems and has the negative effect of distorting prices of goods and services.

“In view of the above, all mobile payment system providers and merchants are hereby directed to discontinue cash-in and cash-out with immediate effect. Furthermore, all economic agents are with immediate effect directed to discontinue cash-back facilities,” read a recent statement from the central bank.

 

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